FEATURE: How to catalyse a race to the top

At this week’s Chatham House Conference on Climate Change, the theme was climate resilience and security. Perhaps unsurprisingly in these tough economic times, much of the debate was about how climate change affects economicsecurity. Participants were eager to discuss the economic risksEconomic risks can be manifested in lower incomes or higher expenditures than expected. The causes can be many, for instance, the hike in the price for raw materials, the lapsing of deadlines for construction of a new operating facility, disruptions in a production process, emergence of a ... of not acting on climate change. Attention crystallised on the question of how champions across government and industry can support a ‘race to the top’ in climate-friendly investments.

Climate science sends its strongest message yet

The conference opened with a preview of likely messages from the forthcoming Fifth Assessment Report (2014) of the Intergovernmental Panel on Climate Change. Like its predecessors, this Report is due to detail the changes to the Earth’s climate, the contributions by manmade activity, and the planet’s prospects. This time, the message will be even more sobering.

A senior figure from the IPCC (whom we can’t name under Chatham House Rules) highlighted the most recent science, based on air samples extracted from miles deep in the Greenland ice sheet, where bubbles have been trapped for millennia. This analysis shows that carbon dioxideCarbon dioxide (CO2) is emitted in several ways. Naturally through the carbon cycle and through human activities like the burning of fossil fuels. These human activities have increased CO2 concentrations in the atmosphere since the beginning of the industrial revolution and these high ... concentrations in today’s atmosphere are a third higher than at any previous time in the past 800,000 years; the rate of increase of carbon dioxide concentrations is 100 times higher than at any other time during this period. The Greenland ice sheet is melting at an unprecedented rate.

Scientists say we should act to limit average global warmingHuman activities are adding greenhouse gases, particularly carbon dioxide, methane and nitrous oxide, to the atmosphere, which are enhancing the natural greenhouse effect. While the natural greenhouse effect is keeping average temperature on earth at about +15°C, this enhanced greenhouse effect ... to 2 degrees Centigrade above pre-industrial levels, but there is a fast-shrinking window of opportunity to do so. We are pumping greenhouse gas emissionsGreenhouse gas emissions cause dangerous anthropogenic climate change. Emissions include CO2, fluoridated gases, methane which are emitted by human activity such as deforestation and burning fossil fuels, and water vapour. into the atmosphere at a faster rate than ever. Governments’ pledges to cut emissionsEmissions of greenhouse gases, greenhouse gas precursors, and aerosols
associated with human activities, including the burning of fossil fuels, deforestation,
land-use changes, livestock, fertilisation, etc. (IPCC) make up only half the cuts needed. In this context, experts in climate policyClimate change policy and legislation drives the transition to a low carbon economy, creating opportunities and risks to which businesses must respond to succeed. talk of a ‘six gigatonne gap’ between the amount of carbon that must be prevented from release in the atmosphere, and actual, political pledges to curb emissions.

The message is clear: the urgency to cut greenhouse gasGreenhouse gas emissions cause dangerous anthropogenic climate change. Emissions include CO2, fluoridated gases, methane which are emitted by human activity such as deforestation and burning fossil fuels, and water vapour. emissions has never been greater.

The disruptive impacts of climate change are being felt already

Participants observed that climate change impactsConsequences of climate and climate change on natural and human systems. (IIED)A specific change in a system caused by its exposure to climate change. Impacts may be harmful (threat) or beneficial (opportunity). (UKCIP) were biting harder and deeper –and faster – than they had imagined only a few years ago. Climate change acts as a ‘multiplier’ to existing threats to human security and wellbeing. Our global society is experiencing a shock: mass food insecuritysee food security driven by unseasonable weatherWeather refers to the state of the atmosphere with regard to temperature, cloudiness, rainfall, wind, and other meteorological conditions. (UKCIP) and spikes in world food prices that even affects middle income households, let alone the poorest; water insecurity that causes stress for human populations and their means of livelihoodSustainable livelihood includes job opportunities that are of a non-invasive type, and exclude extensive felling, heavy fishery, mono-cultures and other activities than permanently harm the environment; it also includes an lifestyle that takes care of any gives assets, such as fresh water or .... Issues such as tensions over fossil fuelEnergy from fossil sources, such as natural gas and oil. This type of energy contributes to climate change and because of its finite nature it is not a permanent resource. resources in the Arctic, trade conflicts around clean energy technology and carbon taxalready in reegle but keep for thesaurus integration (no need to translate) on aviation were mentioned.

The aggregate impact of extreme events such as the Thai floods are rapidly felt at global level due to the interconnected nature of supply chains. CDKN launched its new report “Managing Climate Extremes and Disasters: Lessons from the IPCC SREX Report”, which highlights the implications of extreme events for morbidity and mortalityMortality refers to the state or condition of being subject to death; mortal character, nature, or existence; the relative frequency of deaths in a specific population; death rate; mortal beings collectively; humanity; death or destruction on a large scale, as from war, plague, or famine. – and risk management options available. Advances in science allow for stronger attributionAttribution is the ascription of a causal link between observed changes and a specific intervention. (Glossary Monitoring and Evaluation Terms; MERG Monitoring & Evaluation Reference Group and UNAIDS) between climate change and individual, extreme weather eventsExtreme weather describes weather phenomena that are at the extremes of the historical distribution, especially severe or unseasonal weather. (UKCIP).

Recent work by economists has reinforced the core message of Lord Stern’s 2006 report, which argues the economic wisdom of taking early action to avert dangerous climate change. For every dollar invested today in climate mitigationMitigation refers to actions that reduce our contribution to the causes of climate change. This means reducing emissions of greenhouse gases, such as carbon dioxide (CO2), through energy efficiency and using alternative forms of transport and energy.(UKCIP), $4.30 is avoided later in “cleaning up the mess” according to the International Energy Outlook (2011). Connie Hedegaard, the EU Commissioner for Climate Action, told Chatham House that “we need to focus on the risks of continuing business as usualThe future is projected or predicted on the assumption that operating conditions and applied policies remain what they are at present. See also baseline, models, scenario. (IPCC. Continuing business as usual comes with a high price tag.”

Dominance of national economic interests

National economic interests are always a dominant force, and none more so than during this era of financial crisis. Edward Davey, UK Secretary of State for Energy and Climate Change, emphasised the need to make the UK more competitive in the global economy by gaining an advantage in green jobsA job that preserves or restores environmental quality. in energy and construction. He noted, pointedly, that Germany has a similar strategy. In Denmark last year, green exports grew by 28% and now accounts for 10% of total exportsThe term export means shipping the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" and is based in the country of export whereas the overseas based buyer is referred to as an "importer". In International Trade, "exports" ...;

One presenter delivered an astonishing analysis of countries’ current manoeuvring for territorial expansion and a natural resources grab as a result of climate change impacts – she termed it the ‘geoeconomics and geopolitics’ of climate change. Her presentation showed how, when a Pacific atoll is flooded by sea level riseCoasts are projected to be exposed to increasing risks, including coastal erosion, due to climate change and sea level rise. The effect will be exacerbated by increasing human-induced pressures on coastal areas (very high confidence). {WGII 6.3, 6.4, SPM}; By the 2080s, many millions more people ..., that country’s 200 nautical mile exclusive economic zone (EEZ) disappears, opening the area to claims by others. The disappearance of tiny coral atolls in the Pacific is already causing nations to lose their EEZs and the gas, oil and minerals within them.

Enabling conditions for a ‘race to the top’

At the centre of these economic security arguments was this critical policy question: what are the enabling conditions for a ‘race to the top’ of environmental standards and low-carbon investment? In a world where climate impacts – sea level riseSea level can change, both globally and locally, due to (i) changes in the
shape of the ocean basins, (ii) changes in the total mass of water and (iii)
changes in water density. Factors leading to sea level rise under global
warming include both increases in the total mass of water from the ... and melting ice – are setting off acrimonious races for fossil fuel extraction, it can feel as if there is a greater environmental ‘race to the bottom’ than ever before. Many businesses and governments are showing leadership in their embrace of green growth, but this behaviour has yet to reach critical mass.

Which vital ingredients are needed to attract massive financial flows to low-carbon, climate-resilient investments? What it will take to create green jobs on a ground-breaking scale? Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC) said she wanted the world to reach an ‘economic tipping point’ where green investment was the ‘done thing’, not the outlier. With the fast start finance period coming to an end on 31 December 2012, there is a big gap between developed countries’ finance pledges and the $100 billion needed to finance climate adaptationAdjustments in human and natural systems, in response to actual or expected climate stimuli or their effects, that moderate harm or exploit beneficial opportunities. (IPPC) and mitigationMitigation refers to actions that reduce our contribution to the causes of climate change. This means reducing emissions of greenhouse gases, such as carbon dioxide (CO2), through energy efficiency and using alternative forms of transport and energy.(UKCIP). The gap may partially be addressed by getting more countries to set targets, and tightening ambition on those that already have them. But how will the world actually deliver this transformation?

It is well recognised that the private sector must play a pivotal role in the transition to low carbon economies. However, Chatham House discussions highlighted the importance of governmental leadership to build a more effective and consistent policy framework to enable such investments. Some of the key conditions will include:

First, a stable, higher (and rising) global carbon price will be essential to attract investment into low carbon technologies. The long-discussed floodingThe overflowing of the normal confines of a stream or other body of water, or the accumulation of water over areas that are not normally submerged. Floods include river (fluvial) floods, flash floods, urban floods, pluvial floods, sewer floods, coastal floods, and glacial lake outburst floods ... of the European Union Emissions Trading SchemeEmissions trading (or emission trading) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. It is sometimes called cap and trade. The idea of cap and trade system is to cap the amount of emissions that ... with excess allowancesThe basic tradable commodity within GHG emission trading systems. Allowances grant their holder the right to emit a specific quantity of pollution once (e.g., one tonne of CO2eq). The total quantity of allowances issued by regulators dictates the total quantity of emissions possible under the ..., driving the overall price down, has taken the bottom out of the market and it requires decisive government intervention to correct this.

Second, the importance of an inclusive global political agreement to creating a ‘race to the top’ is widely recognised.

Third, government leaders have a responsibility to counter climate sceptics and vested interests, which persist in spite of the increasing recognition among the public that climate change is real and happening. Connie Hedegaard said: “Climate science is challenged still by those who have a vested interest in continuing business as usual. There is more going on than ever, in cities, board rooms, but there are still too many who have a huge interest in not changing anything.”

The big question remains whether current food price and water ‘shocks’ and other weather- and climate-related threats to human security will compel citizens and their leaders into action. Only by making deep cuts into emissions trajectories – a particular task for the large-emitting nations—will we avoid the huge uncertainties and likely disruptions of a ‘4 degree world’.